TWTR (Twitter) Plunges More Than 20 Percent After Premature Earnings Report

TWTR fell more than 20 percent last Tuesday, following the first quarter earnings reports leaking out to the Internet prematurely. Information on TWTR was published by financial intelligence service Selerity — ironically, via Twitter. Representatives of the service published four Tweets with figures they claimed to be official data on Twitter’s first-quarter earnings, user figures, and revenue, which was followed by a yet another tweet stating that the source of this release was Twitter’s own Investor Relations website. A bit later, this information was confirmed by Twitter.

According to IBTimes, the company’s stock plummeted as a result of missing forecasts.

“Although Twitter’s quarterly profit beat estimates, revenue and mobile monthly active users both missed forecasts. The company also cut its outlook for 2015. Shares of Twitter tumbled 18 percent to close at $42.27, but the stock edged up more than 1 percent in after-hours trading. Twitter’s stock has gained 16 percent this year, and has added nearly 4 percent in the last 12 months.”

However, all that was gained over the course of a year was lost in a matter of hours.

According to the Inquisitr, back in February, the situation around company’s earnings has been no less turbulent, but both investors and experts were much more optimistic about Twitter’s prospects.

“Twitter (TWTR) posted stellar revenue for the 4th quarter … Revenues were up 97 percent year over year from 2013. For those following along at home, that means revenues of $479 million, which crushed analyst expectations of $453.6 million.”

However, Twitter is hardly a company that can be toppled by something as mundane as earnings reports, and they actively look for solutions of this short-term weakness. A day after their stock plummeted, Twitter announced the purchase of an ad targeting company, TellApart, for $532 million in stock. Selerity’s timing with their reveal was really bad for Twitter, though — they had to adjust the deal to the new price of their stock following the Tuesday’s trading — $42.27 per share.

Hopefully, TellApart’s acquisition will help Twitter better aim their ads across different platforms, and TellApart’s advertisement experts will turn out to be a valuable new asset. Anyway, it seems that Twitter has to make some changes if it wants to go on growing – despite good results shown by TWTR in the last few years, they have been solid and stable, but not really overwhelming for quite a while.